Cement - March-13 pricing continues to remain weak - Emkay

- All India prices at Rs294/bag declined by ~Rs4/bag or -1.3% mom in March. Sharp decline seen in south (-3.2% mom) & central region (-2.8% mom) followed by east (-1% mom)

- Cement demand remains extremely weak. Estimate cement dispatches to have grown of 2.5-3% yoy in Q4FY13 against a healthy 9% growth seen in Q4FY12. FY13 demand growth ~5%

- Weak offtake restricting manufacturers to extend H1FY13 pricing power. H2FY13 cement prices +6% yoy as compared to +16% yoy in H1FY13. Muted volumes to mean mid single digit topline growth for cement companies

- Higher freight cost to mean yoy decline in EBIDTA/t. Cut earnings by 2-8% led by lower exit prices for FY13 & Lower Volumes. Retain Reduce on ACC & Hold rating on Ambuja & Ultratech. Remain positive on Grasim, Madras & Shree Cement.

Source : Equity Bulls

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